Newton Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 shares of $10 par common stock. At no time has Newton issued any potentially dilutive securities. Listed below is a summary of Newtons common stock activities.
1. Number of common shares issued and outstanding at December 31, 2005 ....2,000,000 2. Shares issued as a result of a 10% stock dividend on September 30, 2006 .....200,000 3. Shares issued for cash on March 31, 2007 ...................2,000,000 Number of common shares issued and outstanding at December 31, 2007 .....4,200,000 4. A 2-for-1 stock split of Newtons common stock took place on March 31, 2008. Instructions (a) Compute the weighted-average number of common shares used in computing earnings per common share for 2006 on the 2007 comparative income statement. (b) Compute the weighted-average number of common shares used in computing earnings per common share for 2007 on the 2007 comparative income statement. (c) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2007 on the 2008 comparative income statement. (d) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2008 on the 2008 comparative income statement.
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